WEALTHY pensioners could be stripped of their winter fuel allowance, Ed Miliband has suggested as he admitted his party needs to do more to control welfare spending.

Ed Miliband has admitted Labour needs to do more on controlling welfare spending [PA]

On a day that his chancellor Ed Balls was condemned for his proposals to bring back the 50p tax band, the Labour leader said “tough choices needed to be made.”

Mr Miliband warned that major chances were necessary to “cut the costs of failure in the system” as the party which left the nation in debt set out its plans to wipe the deficit by 2020.

In a newspaper article he wrote: "If we are to tackle the deficit, we also have to do more to control social security spending.

"That means making tough choices this Government has ducked, such as scrapping the winter fuel allowance for the richest five per cent of pensioners.

"But to deal with welfare spending properly, we will need to make big reforms to cut the costs of failure in the system."

The allowance currently gives up to £300 to applicants for fuel costs.

Around £21.4million was paid out in 2012-2013 as part of the scheme.

However Labour’s financial competency was again called into question today with the fall out of Ed Balls’ plan to re-introduce the 50p top rate of tax.

Labour's hypocrisy on taxation is breathtaking

Danny Alexander, the Chief Secretary to the Treasury

The move, while popular with voters, could risk the economic recovery, according to City experts.

Former City minister Lord Myners ridiculed the scheme, who said it would not not even achieve a "pass at GCSE".

He said: "It is not clear how this is going to help the UK economy compete with the world's growth economies."

Lib Dem Danny Alexander, the Chief Secretary to the Treasury, went even further and said: "Labour's hypocrisy on taxation is breathtaking.

"In government they left a system full of loopholes for the wealthy to exploit.

"It seems Labour have learnt nothing from the past few years and would undermine the foundations of Britain's economic recovery."

And Foreign Secretary William Hague criticised Mr Balls' proposal saying it sends the wrong signal to the world.

He said: "I see as Foreign Secretary every day the rest of the world now seeing Britain with falling unemployment, with low inflation, with a real return of economic confidence, the long-term economic plan of this Government is working.

"Ed Balls is sending the signal that if there was a Labour government we would go back to high taxing, high borrowing, high spending, and that is an anti-business, anti-job creation agenda."

Ed Balls' proposals to bring back the 50p tax rate have come under fire [REUTERS]

Mr Balls had to defend himself this morning, saying the proposal was not “anti-business.”

On the BBC’s Andrew Marr show, the shadow Chancellor declared: "We are a pro-business party. This is not an anti-business agenda but it's an anti-business as usual agenda."

"It's absolutely not back to the 1980s or the 1990s," he added. "I was part of a government which did very many things to open up markets, make the Bank of England independent, to work closely with business but the reality is we are in very difficult circumstances and because, if I'm honest with you, George Osborne's failure in the last few years, those difficult circumstances will now last well in to the next parliament."

Speaking on benefit cuts, he echoed Mr Miliband’s words in the Sun on Sunday and said while Labour was planning to strip wealthier pensioners of winter fuel payments, it would not axe free bus passes or television licences.

"Free bus travel is actually very important and very liberating and we won't touch that," he said.

On the show he appeared to rule out any further increases in the top rate of tax.